New Zillow data suggested the landscape finally looked different in a swath of Sun Belt and Midwest metros
First-time buyers endured years of tight inventory, rapid price growth and punishing mortgage rates. New Zillow data released this week suggested the landscape finally looked different in a swath of Sun Belt and Midwest metros, with Jacksonville, Fla., ranked the strongest market for first-time buyers in 2026.
Zillow’s analysis of the 50 largest US metros placed Jacksonville at No. 1, followed by Birmingham, San Antonio, Atlanta and Houston, where lower rent burdens, more affordable listings and lighter competition gave renters a clearer path to ownership.
In the top-ranked markets, up to 68% of listings were affordable to a median‑income household, according to the company’s estimates.
“First-time buyers are finally seeing some light at the end of the tunnel,” Orphe Divounguy, senior economist at Zillow, said in the release.
“Affordability is still a challenge, but rising incomes, stabilizing prices and improving inventory are creating real opportunities in parts of the country. In the strongest markets for first-time buyers, they’ll find more choices, less competition and a clearer path to homeownership than they’ve had in years.”
Sun Belt and Midwest pulled ahead
Zillow’s ranking reflected a pattern mortgage professionals already watched unfold.
Earlier this year, a Cotality index showed a “two-speed” market, with high-cost coastal and some Sun Belt hubs seeing price corrections while the Midwest and Northeast held up on the back of relative affordability and stable employment.
At the same time, First American’s Real House Price Index showed affordability improving in all 50 states by late 2025, even if conditions remained well short of pre‑pandemic norms.
“Affordability ended 2025 on its strongest footing in nearly three years,” Mark Fleming, chief economist at First American, said earlier this year.
Zillow’s list leaned heavily on metros where inventory recovered faster and wages went further: six of the top 10 were in the Sun Belt, while Midwestern standouts such as St. Louis and Detroit offered deep pools of relatively affordable stock.
Why Jacksonville stood out – and what it meant for lenders
Jacksonville’s edge rested on a blend of metrics attractive to rate‑weary renters. The metro’s rent burden sat at about 23% of median household income. Nearly 48% of listings were affordable to a median‑income buyer. Zillow’s methodology also showed roughly six affordable listings for every 100 renter households.
Even so, the report underscores that the opening for new buyers remains narrow.
In metros like Jacksonville and Birmingham, more affordable inventory and softer competition gave first-timers room to negotiate on price and terms.
In coastal gateways such as New York, Los Angeles and Miami, where rent burdens stay high and affordable listings sparse, the work remains focused on creative structuring, down-payment assistance and longer timelines.
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